Travel|‘Price Gouging’ and Hurricane Irma: What Happened and What to Do

Advertisement

Supported by

‘Price Gouging’ and Hurricane Irma: What Happened and What to Do

Image

A monitor at Miami International Airport became a list of cancellations Friday. More than 9,000 flights had been cancelled at airports in the path of Hurricane Irma by Monday afternoon.CreditCreditWilfredo Lee/Associated Press

“I was very impressed their social media team was empowered to actually resolve the situation, not just pass me to someone else,” Ms. Dow said. “The Delta rep who reached out to me on social media was the same rep who found the $349 ticket from Miami to Phoenix with one stop through Atlanta and booked it real time.”

Delta and other airlines that were accused of wrongdoing denied the allegations.

“We did not change ticket prices when this happened, and as of last Wednesday afternoon we were booked full for the rest of the week out of Florida,” Charles Hobart, a United Airlines spokesman, said.

But questions remained, such as: Why exactly were customers faced with such steep price hikes in the initial lead-up to Hurricane Irma and is there anything travelers can do in the future to avoid such situations?

Were Airlines Purposely Raising Airfare in the Lead-Up to Irma?

The short, technical answer appears to be no. But that’s not likely to make anyone who was in this unfortunate situation feel any better.

Price gouging refers to raising prices on goods and services to unfair levels, particularly during times of crisis, and many states have laws designed to prevent this practice.

When customers in Florida were looking to change their flights so close to their departure date and saw such dramatic increases, it sure looked like classic price gouging. But according to the airlines and even consumer advocacy experts, that term was being misused when describing the price jumps.

“It’s just the computer programs doing what they do when it’s last minute and seats are scarce.” George Hobica, founder of AirfareWatchdog.com, said.

The computer programs Mr. Hobica is referring to are also known as yield management systems, which are algorithms that consider supply and demand and set fares. When demand increases, the prices rise.

“There are no ethics valves built into the system that prevent an airline from overcharging during a hurricane,” said Christopher Elliott, a consumer advocate and journalist. The outcry suggests that customers think that there should be.

“It seems that if we can program systems to be intelligent enough to respond to spikes and lulls in demand, then it doesn’t seem a stretch to have the intelligence to adapt to declared states of emergency,” Ms. Dow said.

Airfare data by Hopper shows that the price increases that took place during the lead-up to Irma were similar to those from the two weeks prior, suggesting that the price changes were typical for a week of departure flights.

What Can Travelers Do in These Situations?

The general rule of thumb when trying to book affordable airfare is that the earlier, the better. This rule is useless, though, when you’re in an emergency rebooking situation.

“The problem with something like the hurricane is that everyone is trying to buy at the last minute,” Patrick Surry, a data scientist at Hopper, said. “There aren’t really tools on the market right now that help consumers protect themselves in extraordinary circumstances like this one.”

“It seems like shaming the airlines on Twitter worked wonders so perhaps that’s the best ‘negotiation’ tactic,” Mr. Hobica said of the tweet that sparked the initial outrage over suspected price gouging.

So if you find yourself stuck with an expensive ticket and shortly after your airline institutes a price cap, as many did for Hurricane Irma, “it’s probably worth giving the airline a call to see what your options are,” Mr. Surry said.

One could speculate that airlines may treat similar situations differently the next time, given the strong backlash this time.

“I think in the future, airlines will be more cognizant of the optics when fares spike up in an emergency when there are few seats available last minute,” Mr. Hobica said. “So they’ll probably cap fares as they did in the Irma situation.”

Ms. Dow thinks more can be done to account for emergency situations like national disasters.

“Unlike an earthquake that would take people by surprise, everyone knew a monster storm was heading that way, so the airlines had plenty of time to adapt and put policies in place prior to evacuations,” Ms. Dow said. “All of the airlines announced ticket price policies after people started expressing themselves on the topic.”